Senator WILLIAMS (New South Wales—Nationals Whip in the Senate) (18:59): I rise to speak on the Fairer Private Health Insurance Incentives Bill 2012 and related bills. I ask: what is this bill doing in the Senate? I will tell you why it is here. Let us go back to the untruths spoken on 20 November 2007. Federal Labor leader Kevin Rudd wrote to the Australian Health Insurance Association and said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor —

that is you lot over there—

is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

I am right that that lot over there are federal Labor, aren't they? That is what the then Leader of the Opposition, the politically slain Prime Minister, Mr Kevin Rudd, had to say on 20 November 2007. Two months earlier, in a media statement, shadow minister Roxon said:

The Liberals continue to try to scare people into thinking Labor will take away the rebates.

This is absolutely untrue.

My colleague Senator Birmingham spoke an hour or so ago. We were chatting at the side of the chamber and we were saying that people have lost trust in the government. The Australian people do not trust you. They do not trust you because you said before the 2007 election, 'There will be no new taxes. We're not going on a taxing spree.' Along came the luxury car tax, the alcopops tax and the flood tax. We have got the mining tax coming; the carbon tax has been through. They are a government of taxation, because they have blown the dough. They are broke. They have sent us into $232 billion of gross debt as of last Friday.

Here we have another broken commitment by federal Labor—that lot over there, the Australian Labor Party. I must clarify that, because we do have a representative in this Senate from the Democratic Labor Party, and that has a totally different attitude from the Australian Labor Party. I ask the question again: what is this bill doing here? Let's check out the member for Lyne, Mr Oakeshott, who supported this bill in the other place, in the House of Representatives.

Senator WILLIAMS: 'A man of vision.' I would say a man of betrayal to his electorate, Senator Feeney, who was complicit in the carbon tax and complicit with the Prime Minister, Ms Gillard, who said there would be no carbon tax. Mr Oakeshott was complicit, along with Mr Windsor, in betraying the Australian people with that broken promise. I go back to my point: the Australian people do not trust you, and why should they, when you are doing backflip after backflip with your money mismanagement and your waste and your new taxes, crippling the private sector? That is what you are about. Let us have a look at what Mr Oakeshott did. Mr Oakeshott is prepared to walk away from the people of Lyne on this, just as he did on the carbon tax and the independent youth allowance, where the people in Lyne, New England and those inner regions suffered until my colleague Senator Nash fought the fight of millions to finally bring the government around to having some sort of conscience for those people from regional areas who want to go to university. I will quote from the Port Macquarie News of 11 February. Under the headline 'Nurses make their feelings known' it says:

Dozens of nurses from Port Macquarie and Coffs Harbour rallied outside Rob Oakeshott's electoral office this morning, in an attempt to sway the MP away from voting for means testing the private health insurance rebate.

Perhaps unsurprisingly, Mr Oakeshott's Clarence St office was empty.

Here is another one, from the Port Macquarie Independent, headed, 'Oakeshott's health decision slammed'. It says: 'Ramsay Health Care chief executive Christopher Rex has hit back at Rob Oakeshott's decision to support means testing of the private health insurance rebate, saying that, in his view, the legislation represented poor policy and could have an impact in rural and regional areas like Port Macquarie. According to Mr Rex, Mr Oakeshott never visited the Port Macquarie Private Hospital.' That is not surprising. I will repeat that: 'According to Mr Rex, Mr Oakeshott never visited the Port Macquarie Private Hospital to hear the concerns of doctors but relied on one line out of a release in August 2011 as the key justification for his decision.' This is amazing. That is what this legislation is doing here in the Senate and that is why it is in front of us: Rob Oakeshott sided with his Labor colleagues—as he did after the August 2012 election and gave the government the numbers to pass it through the House of Representatives.

Here is my concern: people will leave the private health system. They will leave in droves and downgrade their level of insurance because they simply cannot afford it. It will be the Aussie battlers, those working families that Labor once used to stick up for about a hundred years ago and have not since. They are the ones who will downgrade their level of insurance. Some will leave. There is no doubt that some will leave. Let us have a look at what will happen then. As they leave, the insurance companies will be forced to raise their premiums. Then more will leave and, as they leave, they will simply put more pressure on our public health system—our public hospital system run by the states. I asked a question in this place a couple of years ago about the Greater Western Area Health Service in western New South Wales. The butchers had cut off supplying meat to Gilgandra and Coonamble hospitals. Why? Because they had not been paid. That was the state of New South Wales Health—under, of course, a Labor government. When a small business has to cut off supplying meat to a country hospital, then you have a serious problem. And what are you going to do with this legislation? You are going to dump more onto that same hospital system that is already under enormous stress. That is the problem we face.

The system used to be very good. I remember when I left school and the first year I was working, in 1973. At that time everyone took out private health insurance. It used to cost me about $100 a year—quite a bit of money in those days but affordable. Along came Prime Minister Whitlam and Medibank—he went, of course, but not soon enough—and then I was paying $400 a year, so I dropped out of private health insurance. I lived in a country town and I thought I would take a punt and drop out of it. It was only 3½ or four years ago that I rejoined private health insurance. I had pulled out because I simply could not afford it as the price of insurance went up and up and up. And that is the problem we face—that when more people pull out there is more stress on our public health system. You only have to go to a place such as Ashford, which I visited a couple of weeks ago, to see this. The community health centre there is run by Hunter New England Health, who do their best under pretty tough circumstances and budget restrictions. Every time it rains the roof leaks severely and the water runs down the walls. The building needs a new roof and it needs to be painted inside. The staff there just get on with doing their job, and they do a wonderful job. But the problems they face are the sorts of problems we have in the public health system simply due to the lack of funds.

Perhaps we should just let the states raise their royalties on minerals, giving them some more money to carry out their duties in their health systems, but the government want to go after those as well. We know why. It is because they are broke; it is as simple as that. They have committed to a budget this May that will go into surplus next financial year. Let us go back and look back what happened with the current budget. Two years ago, they budgeted for a deficit of $12 billion for the current financial year. In the May budget last year that was budgeted at $22 billion. Now we find that the budget for this financial year is going to be $37 billion in the red. We have gone from an estimated $12 billion two years ago to $37 billion. So what this measure is about is transferring the cost from the federal budget bottom line to the states. This is a financial saving, as they see it, for the federal budget bottom line, but when people pull out of private health insurance, and they will, this will just put more costs on the states. That is what this is about: transferring actual costs from the federal budget to the states.

Let us look at specialist services. Visiting specialists attend regional private hospitals, and thank goodness they do. Any tinkering with the rebate that causes a cutback in demand in regional private hospitals will flow directly to specialists, who will retreat back to the cities. We need the surgery to be carried out so that those surgeons can make some money in their profession, but if they do not do that in regional areas then they will go back to the cities where they can be flat out all the time in the bigger populations. This is a problem, denying regional patients local access to the expertise and services they need and forcing those patients to travel further, and at greater cost, for consultations and treatments.

It is too simplistic to assume that not enough people in regional areas would be affected by the proposed means test thresholds, of $80,000 for singles and $160,000 for couples, to warrant concern. Once the insurance pool shrinks, when people leave insurance and so the number paying the premiums shrinks, premiums go up. Research last year by Deloitte's shows that 1.6 million people in the government's targeted annual income range will dump their private hospital cover, with another 4.3 million downgrading their cover. I will repeat those figures. Deloitte's are saying 1.6 million people will dump their private hospital cover, with another 4.3 million downgrading. The initial exodus will force premiums up an estimated 10 per cent for those left in health schemes, putting health insurance beyond the reach of lower income earners and causing a second exodus. This is the problem—the domino effect. The fact is that 5.6 million Australians with private cover earn less than $50,000 a year. They cannot afford massive increases in their premiums. You will see more of them exiting the system. Deloitte's adds that public hospitals will be overrun as more than 845,000 extra admissions will pour through their doors. I repeat: 845,000 extra admissions. This is the problem. I would not say that Deloitte's is a company whose modelling and research findings you would disregard.

Senator WILLIAMS: Exactly, Senator Edwards. I take your interjection: they are a very credible company. They are saying that 1.6 million people in the government's targeted income range will dump their private hospital cover and—this is scary—another 4.3 million people will downgrade their cover.

Senator WILLIAMS: Treasury! You listen to Treasury, Senator McLucas, when you wish to, but at other times you will not. We could take you down the carbon tax road—but we will not go there. This removal of the incentive is simply another tax by this big-spending government. It is in a different way, but it is more money into the Treasury coffers as Treasurer Swan tries to get the budget into the black after making a colossal mess of our finances. You couldn't believe it! We have a Future Fund of $73 billion that the coalition put aside when it was in government, thank goodness, and it is lucky that has not been raided, but we have now gone to a gross debt of $232 billion, and the interest bill alone on that is going to be huge. So here is an attempt by the government to help get their budget figures back in the black that is going to cause enormous damage to our health system. It is as simple as that. Already in the country areas we have nurses who are overworked, working double shifts, and I can take you to the country hospitals and introduce you to the nurses. We have doctors working hard—

Senator WILLIAMS: Senator McLucas, I will take your interjection. In the town of 12,000 people that I live in we do not have a private hospital. We have a public hospital, and you are going to overload it with more costs and put more work on those doctors and nurses because people are just going to withdraw from private health insurance. Do you not pay any attention to Deloitte's figures there? You think they are just porky pies, do you?

This is a problem that we have in regional areas. Already we have been left behind by many services in the health system. Thanks go to the great nurses who work so hard and the doctors. I can go down to my local doctors surgery and talk to the doctors there, as I always do when I go for my annual check up—I have a chat about how things are going. They not only look after their doctors surgery, they look after the hospital and the aged care facility. Then they get called out on weekends and on emergency. That is the public health system, and what are you doing? You are going to put more work on them as people leave the private health system.

They will not travel to the private hospitals. They will pull out and you are going to put more work on them. As I said, you are just simply shifting the cost from the federal budget onto the state budget and onto an already overstressed public health system through every state in Australia. This is what you are about.

The fact is that you have blown the money—you have wasted the money—and now there is your political promise of returning the budget back to surplus in May. I would say that you might be able to bring out the figures with a little bit in the black this May, but you wait until September 2012 and the actual realisation of that financial year. It will not be in the black, it will be in the red for sure. Labor parties do not understand what black print means on the bottom line of a budget.

I can take you back to the history of the late eighties and early nineties in South Australia, Victoria, Western Australia and Tasmania, where they all went broke under the Australian Labor Party's financial management. At the same time, the so-called 'world's greatest treasurer', Mr Paul Keating, was sending our nation broke at a federal level. Now we have it all over again. What about 13 years of the Hawke-Keating government? There were four budget surpluses, I think. We have never seen one in this one, so we are talking about over 17 years of Labor governments with four budget surpluses. That has happened all my life: give them the cheque book and they will empty the bank account, and more—then just run up the debt. And who has to clean up the financial mess? Every time when the coalition gets elected they have to clean up the financial mess.

Look at Queensland! For those people listening on radio now, here we have an election in Queensland. Under their figures Queensland will owe $85 billion by 2015. At a guess, the population of Queensland is 4½ million people, so 4½ million people will owe $85 billion—'b' for billion. When the Howard government was elected we had $96 billion worth of debt spread amongst about 19 million people—at a guess. Queensland has $85 billion of debt for 4½ million people to service that debt. They are broke. That is why their credit rating has been downgraded, that is why they are paying high interest rates and that is why they are selling off their rail system—because they are broke. And who has been managing their finances? The Australian Labor Party. And that is why on 24 March I hope that they get their just deserts. I am sure they will, because anyone who sends your state broke deserves to be thrown into political history for years and years.

That is exactly what is going to happen, because the Queenslanders realise what sort of a financial mess their state is in.

Senator McLucas interjecting—

Senator WILLIAMS: Senator McLucas, you are well aware of it too: $85 billion worth of debt is something you should be absolutely ashamed of. It is where your party has taken it. It is just sending the state broke, the great state that was built for decades under balanced budgets, and they never borrowed money. They established their electricity right out to the western country, and the bitumen roads and the tourist industry. They did everything to establish the industries and never borrowed money. If only you could ever learn, but you will never learn. So long as I breathe breath it will be the same old story: give Labor the cheque book and down the tube you go. Nothing changes.

That is what this is about. You will drive people out of private health insurance and you are going back on your word. Mr Rudd made the commitment and Ms Roxon made the commitment to the Australian people never to touch this, and what are you doing? As I said, the Australian people do not trust you because with everything you say the next thing is that you are back flipping and doing a reverse—going back on your word like on so many issues. That is why the people have lost trust in you, lost faith in you and simply do not believe what this government says. You will take people out of the private health insurance industry, you will up the premiums of that smaller net which is left behind and then more will leave as that compounds—the domino effect—and it will all just fall back on our public health system, that is already overburdened, overworked and underfunded. That is what you will do, as sure as I speak now.